EU approves carmaker Opel takeover by France’s Peugeot PSA

French carmaker PSA Group (PEUP.PA) secured unconditional EU antitrust approval on Wednesday to acquire General Motors’ (GM.N) German unit Opel, a move which will help it better compete with market leader Volkswagen (VOWG_p.DE).

The European Commission said the deal did not pose any competition concerns.

PSA, the maker of Peugeot and Citroen cars, has pledged to return Opel and its British Vauxhall brand to profit.

$1.8 bn PNB fraud, macro-data hit equities’ movement

Mumbai, Feb 17: The weekly trade in the Indian equity markets was almost flat. However, a slew of domestic developments like a $1.8 billion fraud reported by the Punjab National Bank (PNB) and release of major macro-economic data impacted the movements of the two key equity indices, analysts said.

On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) rose a tad by 5 points or 0.01 per cent to close at 34,010.76 points.

The wider Nifty50 of the National Stock Exchange (NSE) closed trade at 10,452.30 points — bit lower by 2.65 points or 0.02 per cent from its previous week’s close.

“Local factors were more at work during this week. Globally, the markets — especially the US markets — have done very well over the last six sessions. But upper moves in the domestic markets have been limited because of local factors,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.

“The market sentiments kept facing new challenges one after the other. This caused some concern in terms of their financial impact and/or political repercussions,” he added.

According to Jasani, it was the third consecutive week of losses for the Nifty50 index.

During the week, a massive-sell off in the banking sector stocks was triggered after the Reserve Bank of India (RBI) announced new norms to deal with non-performing assets on Monday.

Besides RBI’s latest move, the massive $1.8 billion fraud detected at one of the Mumbai branches of PNB — the country’s second largest public sector bank — on February 14 also spooked investors.

The markets were closed on Tuesday for Mahashivratri.

“The truncated week began with a gap-up opening on Monday; however, bulls failed to keep the momentum and eventually ended the week on lower note as the sentiments got further dented by a $1.77 billion fraud reported by the PNB earlier this week,” D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, told IANS.

PNB shares started to decline after the bank detected a multi-crore fraud case and authorities blamed billionaire diamond trader Nirav Modi for the fraud along with wife Ami, brother Nishal and maternal uncle and business partner Mehul Choksi.

The bank’s shares plunged drastically following the news — over 9 per cent — along with the stocks of Choksi-promoted jewellery company Gitanjali Gems, which plunged almost 20 per cent.

On the macro-front, Aggarwal said: “The CPI (Consumer Price Index) fell marginally to 5.07 per cent in January, while industrial activity has shown growth of 7.1 per cent in December.”

“The December growth showed not only a robust year-on-year growth but also a strong chronological improvement in the industrial activity,” he added.

On the currency front, the rupee strengthened by 18-19 paise to close at 64.21-22 against the US dollar from its last week’s close at 64.40.

Banks stocks, rising trade deficit drag equity indices lower

Mumbai, Feb 16: Indian equity markets on Friday closed in the negative territory for the third consecutive session as heavy selling pressure in banks, auto, capital goods and metal stocks, along with rising crude oil prices, dampened investors’ risk-taking appetite.

Market observers said macro-data which indicated widening trade deficit in the country, coupled with continued outflow of foreign funds, dented investors’ sentiments.

On a closing basis, the wider Nifty50 of the National Stock Exchange (NSE) declined by 93.20 points or 0.88 per cent to 10,452.30 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE closed at 34,010.76 points — down 286.71 points or 0.84 per cent from its previous close.

The BSE market breadth was bearish as 2,145 stocks declined as against 667 advances.

In terms of the broader markets, the S&P BSE mid-cap index closed lower by 1.20 per cent and the small-cap index by 1.22 per cent.

“Markets corrected sharply on Friday after failing to cross the recent highs in the morning session. Market sentiments were weak due to a jump in India’s trade deficit in January,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

“Also, a rise in global crude oil prices affected the market sentiment. Major Asian markets were closed due to a holiday, barring the Nikkei index which ended on a positive note, while European indices like FTSE 100, DAX and CAC 40 traded in the green,” he added.

Official data released on Thursday evening revealed that India’s exports plunged by 9.80 per cent to $24.38 billion in January, from $27.03 billion worth of merchandise shipped out in December 2017.

The data showed that the country’s imports during the month under review declined by 2.93 per cent to $40.68 billion in January 2018 from $41.91 billion in December 2017.

Vinod Nair, Head of Research, Geojit Financial Services, said: “Market slid despite a positive trend in global market. The alleged fraud in PNB (Punjab National Bank) dented investor’s optimism on banks and expect that the scam may extend to some other banks.”

Following a $1.8 billion fraud detected by PNB, shares of Gitanjali Gems plunged almost 20 per cent while those of PNB closed lower by over 2 per cent.

On the currency front, the Indian rupee weakened by 30 paise to close at 64.21 against the US dollar from its previous close at 63.91.

Major Sensex gainers on Friday were: Kotak Bank, up 1.04 per cent at Rs 1,051.75; Infosys, up 0.96 per cent at Rs 1,124.85; Dr Reddy’s Lab, up 0.83 per cent at Rs 2,212.75; Asian Paints, up 0.62 per cent at Rs 1,143.70; and Tata Consultancy Services, up 0.39 per cent at Rs 2,937.20.

Major Sensex losers were: State Bank of India, down 2.55 per cent at Rs 271.75; Yes Bank, down 2.52 per cent at Rs 311.90; ICICI Bank, down 2.31 per cent at Rs 321; Bharti Airtel, down 2.07 per cent at Rs 419.45; and Maruti Suzuki, down 2 per cent at Rs 8,840.

Gitanjali Gems stocks plunge 20% on $1.8 bn scam, PNB slips 2%

Mumbai, Feb 16: Following the $1.8 billion fraud detected by the Punjab National Bank (PNB), stocks of jewellery company Gitanjali Gems on Friday plunged almost 20 per cent — hitting its lower circuit — while PNB’s shares closed over 2 per cent lower.

Stocks of Gitanjali Gems, the luxury jewellery brand promoted by the main accused Nirav Modi’s maternal uncle and business partner Mehul Choksi, plunged 19.94 per cent to close at Rs 37.55 per share.

“Price-wise, the way the stock of Gitanjali Gems has slipped and the kind of circuit that we are seeing, probably the sequence may continue for some days. From a support perspective, Rs 29-30 is a support,” Sacchitanand Uttekar, Assistant Vice-President, Research for Tradebulls, told IANS.

“But with developments in the company going off-track, how much will it hold is something that time will decide,” he added.

According to market analysts, the stock prices fall to an effective level which gives the traders the chance to reinvest in the stock and arrest the fall.

“The stocks fall to a level where the current negatives seem fully discounted, prompting traders to re-enter. The exchanges keep changing the circuit limits, which typically cushions the rise or the fall in stock prices,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

The shares of PNB — the second largest public sector bank in India — started to decline after the bank detected a multi-crore fraud case in one of its branches in Mumbai on February 14, and authorities blamed billionaire diamond trader Nirav Modi for the fraud.

On a closing basis, scrips of PNB slipped by 2.10 per cent to Rs 125.65 per share, lower by Rs 2.70 from the previous close at Rs 128.35.

PNB on Wednesday told the stock exchanges through a regulatory filing that it detected fraudulent transactions at $1,771.69 million (around Rs 11,515 crore) in one of its branches in Mumbai, which is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).

On the same day, the bank’s shares had plunged drastically following the news of the fraud to close lower by 9.81 per cent at the BSE. On Thursday, too, the scrips dropped by almost 12 per cent.

The fraud, which included money-laundering among other things, concerned the Firestar Diamonds group of Modi, in which the Central Bureau of Investigation (CBI) has booked Modi, his wife Ami, brother Nishal and uncle Choksi.

On Thursday, the Enforcement Directorate launched a nationwide raid on the offices, showrooms and workshops of Nirav Modi.

The CBI on Friday registered a FIR against the Gitanjali Group of companies based on a complaint registered by the PNB.